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Family Heterogeneity, Human Capital Investment, and College Attainment

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  • Adam Blandin
  • Christopher Herrington

Abstract

From 1995 to 2015 the aggregate US college completion rate increased almost 50 percent, but completion trends differed markedly by family background. We consider whether changing college preparedness contributed to growth in aggregate completion and differences by family background. We first document parallel empirical trends in precollege investments, college preparedness, and completion. We use these moments to discipline a quantitative model of intergenerational human capital investment with heterogeneous families. Within the model, investment trends generate half of the empirical increase in college completion. The model implies that subsidizing precollege investments increases college completion and lifetime earnings more than college tuition subsidies.

Suggested Citation

  • Adam Blandin & Christopher Herrington, 2022. "Family Heterogeneity, Human Capital Investment, and College Attainment," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(4), pages 438-478, October.
    • Handle: RePEc:aea:aejmac:v:14:y:2022:i:4:p:438-78
    DOI: 10.1257/mac.20200014
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    Citations

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    Cited by:

    1. Santos, Cezar & Tertilt, Michèle, 2023. "How families matter for understanding economic inequality," IDB Publications (Working Papers) 13080, Inter-American Development Bank.
    2. Suzane Bellue, 2023. "Why Don’t Poor Families Move? A Spatial Equilibirum Analysis of Parental Decisions with Social Learning," CRC TR 224 Discussion Paper Series crctr224_2023_472, University of Bonn and University of Mannheim, Germany.
    3. Dirk Krueger & Alexander Ludwig & Irina Popova, 2024. "Shaping Inequality and Intergenerational Persistence of Poverty: Free College or Better Schools," NBER Working Papers 32467, National Bureau of Economic Research, Inc.
    4. Uta Bolt & Eric French & Jamie Hentall Maccuish & Cormac O’Dea, 2018. "Intergenerational Altruism and Transfers of Time and Money: A Life-cycle Perspective," Working Papers wp379, University of Michigan, Michigan Retirement Research Center.
    5. Dirk Krueger & Alexander Ludwig & Irina Popova, 2024. "Shaping Inequality and Intergenerational Persistence of Poverty: Free College or Better Schools," PIER Working Paper Archive 24-023, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    6. Fujun Chen & Dianxi Wang, 2024. "Gender and Urban-Rural Differences in the Impact of Parents’ Problematic Behaviors on Children’s School-to-Work Transition," SAGE Open, , vol. 14(3), pages 21582440241, September.
    7. Coskun, Sena & Dalgic, Husnu C., 2024. "The emergence of procyclical fertility: The role of breadwinner women," Journal of Monetary Economics, Elsevier, vol. 142(C).
    8. Hu, Wanqi & Huang, Wangen & Wu, Jianxin & Zhang, Chaokai, 2024. "Place-based policies and local human capital accumulation: Evidence from China's special economic zone program," China Economic Review, Elsevier, vol. 85(C).
    9. Cezar Santos & Michèle Tertilt, 2023. "How Families Matter for Understanding Economic Inequality," CRC TR 224 Discussion Paper Series crctr224_2023_456, University of Bonn and University of Mannheim, Germany.

    More about this item

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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